The indictment is based “solely” on information provided by DiPascali, who pleaded guilty and is cooperating with the U.S., Brodsky said. Brodsky attacked the government’s charges, saying DiPascali wasn’t credible because he has “a long pattern of deception that went on for decades.” Brodsky said the U.S. also relied upon handwritten notes of former Madoff employee Annette Bongiorno, which investigators have found.
In arguing his client should be released on bond, Brodsky said “for months and months” Konigsberg and prosecutors had been in talks about the case and he hadn’t fled the country.
Konigsberg was also accused of arranging a “no show” job at Madoff Securities for a second unidentified co-conspirator.
The indictment against Konigsberg includes charges of conspiracy, falsifying records of a broker-dealer, fabricating records of an investment adviser and falsifying statements to the U.S. about employee benefit plans.
Konigsberg was one of dozens of defendants, including JPMorgan Chase & Co. and Bank of New York Mellon Corp., which were custodians of Bernard Madoff’s bank accounts, named as defendants in a lawsuit against the con man filed in New York State Supreme Court in 2009.
Jay Wexler claimed in the suit that he invested “hundreds of thousands of dollars” in Rye Select Broad Market Prime Fund LP, which was managed by Tremont Partners Inc., a Madoff feeder fund.
Konigsberg was described in the suit as serving as Madoff’s personal accountant, and it alleged he signed off on Madoff’s family investments in 2006 and 2007 and received more than $350,000 from Madoff for his services.
The former Madoff employees, Daniel Bonventre, Jerome O’Hara, George Perez, Joann Crupi and Bongiorno are set to go on trial Oct. 7 in Manhattan on charges they aided the largest Ponzi scheme in history.
The defendants appeared yesterday in federal court in Manhattan for a pre-trial hearing in which U.S. District Judge Laura Taylor Swain ruled the jury won’t be told about the suicide of Madoff’s son Mark, or about luxury items bought by several defendants. Prosecutors may tell jurors about a beach house Crupi bought with a $2.7 million bonus, the judge said.
The five defendants, who deny wrongdoing, are accused of helping maintain fake trading records at Madoff’s firm and aiding him in other ways. Prosecutors said their case may last 12 weeks, followed by defense cases.
Yesterday Swain barred the government from telling jurors about a sculpture of a screw Madoff kept in his office, after defense lawyers said the evidence would be crude. The sculpture was recovered after his 2008 arrest.
Swain prohibited jurors from seeing the sculpture or photographs of it. The defense noted the artwork’s “colloquial inference.”
“See if you can get that screw out of the pictures” of Madoff’s office, Swain told prosecutors.
Madoff, 75, is serving a 150-year sentence in a federal prison in North Carolina. His fraud collapsed in 2008 when he could no longer lure new money to fund withdrawals.
The case is U.S. v. O’Hara, 10-cr-00228, U.S. District Court, Southern District of New York (Manhattan).
Copyright 2014 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.